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Optical retailer National Vision (NYSE:NASDAQ:EYE) reported results in line with analysts' expectations in Q2 CY2024, with revenue down 14% year on year to $451.7 million. On the other hand, the company's full-year revenue guidance of $1.83 billion at the midpoint came in 3.3% below analysts' estimates. It made a non-GAAP profit of $0.15 per share, down from its profit of $0.17 per share in the same quarter last year.
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National Vision (EYE) Q2 CY2024 Highlights:
- Revenue: $451.7 million vs analyst estimates of $451.4 million (small beat)
- EPS (non-GAAP): $0.15 vs analyst estimates of $0.09 ($0.06 beat)
- The company dropped its revenue guidance for the full year from $1.99 billion to $1.83 billion at the midpoint, a 7.8% decrease
- EPS (non-GAAP) guidance for the full year is $0.48 at the midpoint, missing analyst estimates by 12.8%
- Gross Margin (GAAP): 57.1%, up from 52.8% in the same quarter last year
- EBITDA Margin: 8.1%, in line with the same quarter last year
- Free Cash Flow of $31.86 million, up 171% from the same quarter last year
- Locations: 1,216 at quarter end, down from 1,381 in the same quarter last year
- Same-Store Sales rose 2.2% year on year (1% in the same quarter last year)
- Market Capitalization: $1.10 billion
Operating under multiple brands, National Vision (NYSE:EYE) sells optical products such as eyeglasses and provides optical services such as eye exams.
Specialty RetailSome retailers try to sell everything under the sun, while others—appropriately called Specialty Retailers—focus on selling a narrow category and aiming to be exceptional at it. Whether it’s eyeglasses, sporting goods, or beauty and cosmetics, these stores win with depth of product in their category as well as in-store expertise and guidance for shoppers who need it. E-commerce competition exists and waning retail foot traffic impacts these retailers, but the magnitude of the headwinds depends on what they sell and what extra value they provide in their stores.
Sales GrowthNational Vision is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale.
As you can see below, the company's annualized revenue growth rate of 4.5% over the last five years was sluggish as its store footprint remained relatively unchanged, implying that growth was driven by more sales at existing, established stores.
This quarter, National Vision reported a rather uninspiring 14% year-on-year revenue decline to $451.7 million in revenue, in line with Wall Street's estimates. Looking ahead, Wall Street expects revenue to decline 6.5% over the next 12 months.
Same-Store SalesSame-store sales growth is a key performance indicator used to measure organic growth and demand for retailers.
National Vision's demand within its existing stores has barely increased over the last eight quarters. On average, the company's same-store sales growth has been flat.
In the latest quarter, National Vision's same-store sales rose 2.2% year on year. This growth was an acceleration from the 1% year-on-year increase it posted 12 months ago, which is always an encouraging sign.
Key Takeaways from National Vision's Q2 ResultsWe were impressed by how significantly National Vision blew past analysts' EPS expectations this quarter. We were also excited its gross margin outperformed Wall Street's estimates. On the other hand, its full-year earnings forecast missed analysts' expectations and its full-year revenue guidance missed Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 24.8% to $10.50 immediately following the results.
